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Guest opinion: Give voters control over city utility debt

By Phil Fox

Posted:
05/17/2013 01:00:00 AM MDT

Boulder is about to cross the point of no return on the road to creating the city's own municipal utility without a clear picture of how much the proposition will cost and how deeply in debt the city will sink. While all those involved agree that the city has embarked on a long and expensive process, no one seems to have a handle on exactly how much debt will be required.

The city will have to use debt financing to acquire Xcel's existing infrastructure and to compensate the company for "stranded costs," or investments that Xcel will not be able to recover because of municipalization. Odds are good that a state court will determine the acquisition costs, with the Federal Energy Regulatory Commission deciding stranded costs. Total cost estimates range from $150 million to more than $500 million. Either way, utility customers, some of whom live outside of the city limits, will be on the hook.

City officials started down the municipalization road by asking voters' approval for some basic criteria. The principle of transparency and voter involvement should not be abandoned now. To ensure that those who have to pay the debt have a say in the debt, we've formed Voter Approval of Debt Limits and are circulating petitions to place a charter amendment on the 2013 ballot.

Our amendment contains four important safeguards for voters:

Requires voters to approve the maximum amount of debt the city can issue to operate a city electrical utility, including approving the total cost of debt repayment.

Ensures that non-Boulder residents who are included in the utility have the right to vote on utility debt.

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Requires that debt limit and repayment cost elections be held in conjunction with city council elections.

City staff may complain that guaranteeing voter control over the volume of debt used to create a utility creates an inconvenient hurdle. Over the years, Boulder voters have approved public debt when they've been convinced it's absolutely necessary. Bonds for schools, water and sewer improvements, fire and police pensions and open space have all passed muster with Boulder voters. If the city can make a strong case for debt financing for an electric utility, they're likely to get voter approval, as well.

Boulder voters, however, should never give the city a blank check it can use to obligate taxpayers to an insufferable amount of debt before we even know the true and total costs of taking on a utility.

Voter input and accountability is something on which all Boulder voters can agree. We have a right to know the price tag for starting a city electric utility before we start the utility, not after.

Phil Fox is the spokesman for Voter Approval of Debt Limits. He lives in Boulder.

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